Flipkart Ltd plans to start phasing out advertisements on its desktop website and move them to its mobile platform within three months, as India’s largest e-commerce firm seeks to accelerate its move to becoming an app-only retailer.
Flipkart is readying its mobile ad platform and will start serving ads on its mobile app within the next three months, two people familiar with the matter said. As soon as it starts publishing ads on its app, the company will encourage its ad clients to shift their marketing efforts on the mobile, the people cited above said, on condition of anonymity as these plans are private.
The online retailer will not stop publishing desktop ads entirely, but the company plans to gradually phase out desktop ads over the next year, the people said.
A Flipkart spokesperson declined comment.
Though Flipkart generates less than 5% of its sales from ads, it is aggressively building the ads business. Making ads work is important enough for Flipkart that chief executive officer Sachin Bansal is spearheading this business. Bansal is building a large ad monetization team and bought mobile advertising technology firm AdIQuity Technologies earlier this year to improve the company’s efforts.
The company’s move to shift ads toward its mobile app follows its efforts of shifting customers entirely toward the mobile app. Flipkart and its unitMyntra both shut their mobile websites last month and are considering shutting their desktop sites, Mint reported on 20 March.
Flipkart generates about 75% of its traffic from its mobile app, while that number is 90% for Myntra. Both companies are betting that by becoming app-only, they will reduce costs, get more exclusive customers and reduce dependence on the likes of Google Inc. and Facebook Inc. for marketing.
Some advertisers on Flipkart said they may move their ad spending towards the company’s app, while executives at two electronic makers, which are large ad clients of Flipkart’s, said they would resist such a move by the online retailer. The executives declined to be named as they didn’t want to risk spoiling their relationship with Flipkart.
“As a mobile company, we at Cleartrip are always looking for quality mobile inventory, and Flipkart’s mobile app serves as a great platform for us to advertise,” Cleartrip chief marketing officer Subramanya Sharma said.
Brands across industries, especially large appliance makers, are aggressively increasing their ad spending on the mobile, said Dippak Khurana, chief executive mobile ad tech firm Vserv Digital Services Pvt. Ltd.
“Brands will go where customers are going and it’s clear that Indian shoppers have taken to apps like nowhere else in the world. If Flipkart is getting such heavy traffic from the mobile app, it makes sense for them to show ads there,” Khurana said.
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